A macro- and microscopic analysis of exchange rate pass-through into consumer prices
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Abstract
This cumulative dissertation comprises a collection of studies analyzing the effects of exchange rate movements on domestic prices. Accordingly, this work primarily contributes to the realm of exchange rate pass-through (ERPT).
The first study, single-authored, focuses on ERPT and trade patterns. I examine ERPT to price aggregates in the euro area following the introduction of the euro in 1999. I challenge the conventional use of publicly available nominal effective exchange rates (NEERs) of the euro by developing alternative NEERs based on country-specific import trade flows, rather than the euro area´s aggregated import and export trade flows.
In the subsequent three studies, I shift the focus from aggregate price metrics (i.e., the macroscopic perspective) to the analysis of individual prices for fully disaggregate products (i.e., the microscopic perspective), utilizing scanner data.
In the second study, again single-authored, I examine the significant depreciation of the British pound following the Brexit referendum in June 2016 to determine the role of extensive margin adjustments for ERPT.
Building on this, the third study, co-authored, examines how product-downgrading impacts the distributional effects of inflation.
The fourth study, again co-authored, investigates whether significant devaluations of currencies in Latin America against the US dollar lead to relative price movements of imported and domestic products at the retail level in Latin America.